Mint Lite is a quick update to bring you up to speed on all the news you need to know—and some things that are just fun to know—in five minutes before you start your day
Mexico’s economy has shrunk 1.2% during the January-March period, less than initially estimated, but it is still considerably weaker in 2020 than previously reported, its government has said. Brazil, meanwhile, which is being ravaged by the virus, has reported its steepest monthly deflation in a quarter of a century. For the rest of the news you need to know before you start your day, here’s Mint Lite.
Western India—Rajasthan, Gujarat, Maharashtra, Uttar Pradesh and Madhya Pradesh—is dealing with the worst locust attack in a quarter of a century. This is the start of sowing for the kharif season and crops such as rice, maize, millet, pulses and soybean are under threat, which means food security is at stake. The livelihoods of farmers and agricultural workers already affected by the coronavirus outbreak are also at stake. Rajasthan is currently the worst affected state with more than 14,000 hectares covered by swarms of the grasshopper-like insects. Locusts do arrive in western Rajasthan and Gujarat every year, but the current swarming behaviour is unusual. Climate change has made weather conditions conducive for the swarms to breed, say experts. The swarms could travel further east. India had a longer monsoon season last year, and locucts thrive in wet conditions such as after floods and cyclones. The current outbreak originated in East Africa earlier this year. The outbreak, paired with covid-19, is likely aggravate acute food insecurity in an already fragile region.
Singapore economy likely to slump 7%, fourth bailout announced
Singapore announced a fourth fiscal package of $23 billion Tuesday to counter the economic fallout of the coronavirus, providing specific support to saving jobs. It comes as Singapore’s economy faces its worst contraction since its independence more than half a century ago. The government expects GDP to shrink 4% to 7% this year, down from a previous forecast of 1%-4%. The coronavirus outbreak and measures to contain it have pummeled the trade-reliant city state, and the outlook for external demand has deteriorated. As one of the world’s most open economies, Singapore has been severely hit by the slump in global trade and travel. It will begin easing restrictions from June, and replace it with a three-phase system to further reopen the economy. The forecast also takes into account the risk of a second global wave of infections as countries re-open. The new package takes Singapore’s total support to almost $70 billion, or about 20% of GDP.
As lockdowns ease, more people seem to be driving cars rather than taking pubic transport as they try to avoid crowds and maintain social distancing. It’s bringing near-term relief to an oil market facing its worst crash in history and reeling from an unprecedented collapse in energy demand. Bloomberg calculated mobility trends for 27 cities in Asia, Europe and US and found that more people are driving than taking public transit to commute (chart). In Beijing, Shanghai and Guangzhou, morning traffic is now higher than 2019 averages while subway use is well below normal. Volume on Beijing’s metro system is 53% below pre-virus levels. Similar patterns have emerged for Madrid, Berlin and Ottawa among other cities. Gains made during lockdown in terms of cleaner air will probably reverse.
Germany bails out Lufthansa
Indian aviation companies are looking on with a touch of envy as Germany has agreed on a $9.8 billion bailout for Lufthansa, which has been badly hit by the covid-19 outbreak. The aid package involves the government taking an initial 20% stake that could rise to a blocking minority of 25% plus one share in the event of a hostile takeover. The plan, which requires EU approval and will probably be challenged by rivals such as Ryanair, gives Germany an effective veto over strategy in a company that was privatized 20 years ago. Germany aims to sell its stake by the end of 2023. Exiting depends on Lufthansa repaying the aid and the share price being above the purchase price plus interest. On Tuesday, Latam Airlines filed for US bankruptcy protection, weeks after other airlines, including Avianca, Thai Airways and Virgin Australia, were forced into bankruptcy by the pandemic.
Fairytale for a covid-19 world
Job losses, salary cuts and a fast-spreading virus have made the world seem distinctly unmagical over the past few months, but author J.K. Rowling is all set to publish a fairy tale, The Ickabog, about truth and abuse of power. It will be released free online and is aimed at children stuck in lockdown, but its likely that adults wanting a temporary escape from reality will be among its eager readers too. The first chapters went out on Tuesday, and will continue every weekday until 10 July, Rowling said on Twitter, adding in capitals: “this is not a Harry Potter spin-off". Rowling got the idea for The Ickabog when she was writing Harry Potter and she intended it to be published after Harry Potter and the Deathly Hallows, the last of her seven-book Potter series. But the mostly handwritten manuscript of The Ickabog ended up in her attic and stayed there for a decade until a few weeks ago, stored in a box. She has rewritten parts of it in recent weeks.